BEVERLY HILLS, Calif. -- More than two decades ago, Clive Davis introduced a young woman with a scintillating voice to the music industry at his annual pre-Grammy soiree: Whitney Houston.

On Saturday night, hours after Houston's death at the Beverly Hilton Hotel, Davis -- Houston's mentor, producer, champion and longtime friend -- memorialized her at this year's gala, held downstairs from the same hotel where she died.

With celebrities ranging from Dr. Dre to Tony Bennett in attendance, a somber Davis, reading from a sheet of paper, said: "I personally devastated by the loss of someone who has meant so much to me. She was full of life, looking forward for tonight. She loved music and she loved this night that celebrated music."

He added: "Whitney was a beautiful person and she had a talent beyond compare. She graced this stage ... so many times. So simply put: Whitney would have wanted the music to go on."

He dedicated the evening to her and asked for a moment of silence as a photo of the 48-year-old, hands wide open, looking to the sky, appeared on the screen.

Then, he said with excitement: "Now ladies and gentlemen, let the music begin."

Tony Bennett, the evening's first performer, recounted other recent big-name deaths in the music industry. "First it was Michael Jackson, then Amy Winehouse, now the magnificent Whitney Houston. Let's legalize drugs, like Amsterdam, it's a very sane city now."

He added that Winehouse was "the greatest singer I've ever heard in my life."

The scene was somewhat surreal given Houston's shocking death only earlier in the day. But Grammy President and CEO Neil Portnow, who called Houston a friend, said "canceling the party was never an option."

"A lot of us holding hands tonight, on each other's shoulders ... We'll be celebrating," he said. "The legacy she left will be here forever."

He announced that Jennifer Hudson would perform a tribute to Houston at Sunday's Grammys.

Earlier in the evening, India.Arie said Houston "set the standard for what it is to be a great female artist."

Producer Jimmy Jam said her death was a "bittersweet irony" given that Davis heralded Houston as a great talent to watch when he had her perform at his party in her youth.

"The fact that it happened on this day, this event is where Clive Davis introduced Whitney to the world. We said hello to Whitney at the Clive Davis (gala), it may be appropriate we're saying our first goodbyes to Whitney at a Clive Davis event.

"In a weird way it's appropriate, the show must go on. I think Whitney would have wanted that to happen. ... Tonight I think we begin to celebrate and remember."

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